Indian jewellers can easily increase gold imports from UAE at 5% customs duty
Indian jewelers await increased gold shipments from UAE as CEPA agreement boosts trade benefits
India-UAE CEPA Enables 10% Annual Gold Import Increase for Jewelers
DUBAI: By 2022, the CEPA deal will allow gold and diamond jewelers in India to accept a 10% increase in gold shipments from the UAE to India, reaching 120 tons annually.
The Gem & Jewelery Export Promotion Council of India’s Nirav Bhansali stated, “Jewellers in India have already utilized the 120 tonnes of gold sanctioned from the UAE for 2023–24.”
“This year is going to be the same, the demand from Tanishq, Malabar, Joyalukas etc. is not enough to meet all the requirements.
“Hence, every jeweler in India is waiting for the 10% annual increase in gold purchases allowed under the UAE-India CEPA (Comprehensive Economic Partnership Agreement).”
What CEPA allows
Under the agreement with India, UAE can export 120 tonnes of bullion at 5% customs duty. This is 6% of what India’s jewelers have to pay on gold sourced from any other country/ (it was 15% at one point until Indian Finance Minister Nirmala Sitharaman reduced it to 6% in the last budget.)
“Even after reduction in gold import duty, getting 5% from UAE actually helps India’s jewelers save 1.2 tonnes,” Bhansali said. “Especially at current gold prices, a 1% lower customs duty means a lot of savings.”
And under the CEPA agreement, Indian jewelers will be allowed to increase their holdings of UAE gold by 10% per annum in the medium term. This is what they are waiting for now.
“Only one number is necessary to show how important CEPA is to Indian jewellers,” said Bhansali. “Jewellery accounts for 25% of India-UAE trade of $80 billion.”
